John Rubino: Has The Debt Jubilee Already Started?

[NCR85]

Re: Has The Debt Jubilee Already Started?

Helicopter QE will never be reversed

By Ambrose Evans-Pritchard

http://www.telegraph.co.uk/finance/c...-reversed.html

[Chris]

Re: Has The Debt Jubilee Already Started?

Helicopter QE will never be reversed

By Ambrose Evans-Pritchard

http://www.telegraph.co.uk/finance/c...-reversed.html

"Lord Turner says the current policy has become dangerous, yielding ever less returns, with ever worsening side-effects. It would be better for central banks to put the money into railways, bridges, clean energy, smart grids, or whatever does most to regenerate the economy."

This sounds like Lord Turner is suggesting that governments finance the TECI economy with deficit spending. Who could have known?

I think that idea also feels most natural to the man on the street. If government is going to print money, why not finance production rather than pushing down borrowing costs for the debtors?

[ProdigyofZen]

Re: Has The Debt Jubilee Already Started?

This sounds like Lord Turner is suggesting that governments finance the TECI economy with deficit spending. Who could have known?

I think that idea also feels most natural to the man on the street. If government is going to print money, why not finance production rather than pushing down borrowing costs for the debtors?

Well considering that the UK just enacted a new law that established the equivalent of a Fannie and Freddie in the UK plus the government guaranteed the first 20% loss of principal on a mortgage, I don't think they are heading for a TECI economy anytime soon.

I was speaking with a distressed debt fund in London yesterday and they are expecting housing to rise considerably with the new laws.

[Chris]

Re: Has The Debt Jubilee Already Started?

Well considering that the UK just enacted a new law that established the equivalent of a Fannie and Freddie in the UK plus the government guaranteed the first 20% loss of principal on a mortgage, I don't think they are heading for a TECI economy anytime soon.

I was speaking with a distressed debt fund in London yesterday and they are expecting housing to rise considerably with the new laws.

I'm not at all surprised. Britain is a rentier nation and has been since the early 1900's.

Housing here is totally crazy. Here is what you get for £1m in my neck of the woods:

http://www.rightmove.co.uk/property-...-38191289.html

110 Sq. M. in a noisy part of town. Even New York real estate looks reasonable against this type of thing.

[ProdigyofZen]

Re: Has The Debt Jubilee Already Started?

I'm not at all surprised. Britain is a rentier nation and has been since the early 1900's.

Housing here is totally crazy. Here is what you get for £1m in my neck of the woods:

http://www.rightmove.co.uk/property-...-38191289.html

110 Sq. M. in a noisy part of town. Even New York real estate looks reasonable against this type of thing.

It doesnt look very noisy........

[llanlad2]

Re: Has The Debt Jubilee Already Started?

Well considering that the UK just enacted a new law that established the equivalent of a Fannie and Freddie in the UK plus the government guaranteed the first 20% loss of principal on a mortgage, I don't think they are heading for a TECI economy anytime soon.

I was speaking with a distressed debt fund in London yesterday and they are expecting housing to rise considerably with the new laws.

I agree with the fund.The new law will mean only a 5% deposit will be needed as opposed to 25% to get cheaper rates. But funnily enough the policy has not been met with much approval anywhere. In fact many even question it as they recognise that expensive housing is not necessarily a good thing. I in my possibly deluded way actually think it's the last housing hurrah before policies switch.

[santafe2]

Re: John Rubino: Has The Debt Jubilee Already Started?

This is very much in line with my recent thinking on the subject. If QE is extended into perpetuity, any bonds thus bought being rolled over forever on the central bank’s balance sheet, the effect is equivalent to a public debt jubilee...

It appears the US government plans a semi debt jubilee for student loans. The government has bought up over 1/2 the $1T+ in student loan debt over the last few years and HR 1330 proposes to mitigate those payments and drive the great majority of that debt to the US government and taxpayer. The bill aims to limit student loan debt payments to 10% of discretionary income over 10 years. That should amount to about 5% in repayment. Debt unpaid after that time is forgiven. Of course we'll never claw back a dime from the for profit 'universities'.